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Comment by kapilkale | Hacker News Reader

Tangential: If you believe in Nate Silver, Intrade is underpricing the Barack Obama contract by 20%+.

The contract that pays out $10 if Obama wins is currently trading at $6.70 per contract, implying a 67% chance Obama wins vs Nate Silver's 90%+.

Unfortunately, Intrade and American gambling regulations don't play nice so they don't accept US transactions. They also won't write you a margin account so you actually need to have funds in their system to execute a trade today.

Hard to say which party is inaccurately estimating the outcome, but given the regulatory hurdles around Intrade and the seemingly low volumes, I wouldn't be surprised if they're off.

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Intrade is just one such place to bet. See others listed here: http://www.oddschecker.com/specials/politics-and-election/us...

SkyBet and Ladbrokers for example both have payouts closer to 538's forecast.

What is peculiar is that Intrade is the outlier. In a liquid market this shouldn't happen because it allows for risk-free payouts. So something seems a bit odd about Intrade.

It's possible the campaigns have caught on to Intrade's impact on the media and will now step in when prices fall to much. </conspiracy>

It's very clearly true that one or more backers of Romney are manipulating Intrade. This makes buying Obama on Intrade a spectacular deal.

It isn't entirely liquid. It's a pain to get money into Intrade (esp. for an American).

IEM (http://iemweb.biz.uiowa.edu/quotes/Pres12_quotes.html) and Intrade were up until yesterday off by 10%. Eventually things moved closer, but regulatory hurdles in actually getting money in (+ limits on funding) really hurt arbitrage opportunities.

It's really not difficult at all to get money into Intrade as an American. I had wires show up day-of if I did it early enough or next-day in every other case.

Also of note is that other betting markets were consistently higher than Intrade was for all of the last 6 months basically- there are a lot of theories as to why this may be, but it's regularly been 5%+ lower on Obama.

Well, that opportunity closed up fast. Contract now trading at 9.49.

They don't accept US credit-card transactions. You can mail a check or make a bank wire.

I think the point was that neither of those will make it into your account in time to take advantage at this point.

True. Though intrade has been valuing Obama's chances 10+% lower than 538 at least since the first debate.

Right- thanks for the correction.

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